The desire to keep both global financial regulators and shareholders on side prompted Randall & Quilter (RQIH) to eschew a final cash dividend payment in favour of issuing bonus shares. Investors will receive one new share for every 22 they own, which brings total distributions to an equivalent of 9.9p a share. However, joint-founder Ken Randall said this was a “one-off” and that it would return to cash payments this financial year.
The insurer completed 16 deals, including its largest acquisition to date with the purchase of Global Re for $81m, which inflated gross written premiums. In May, $100m was raised to invest in buying more legacy books of business, although management hopes to complete more transactions with third-party investors, helping boost return on capital in turn. The latter rose to 19.6 per cent in 2019, from 16.7 per cent the prior year.
However, it also ploughed ahead with growing its programme management business, which acts as an intermediary delegating the issue of licensed insurance policies to managing general agents, through which it earns fee-based annually recurring commission. Management has set a goal of achieving MGA premium income of between $1.5bn and $2bn by 2023. Although it has some way to go, last year this more than doubled to $369m.
Numis forecasts net tangible assets of 125p at the end of December 2020, rising to 126p the same time the following year.
| RANDALL & QUILTER (RQIH) | ||||
| ORD PRICE: | 157p | MARKET VALUE: | £334m | |
| TOUCH: | 153-157p | 12-MONTH HIGH: | 226p | LOW: 110p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 136p | NET CASH: | £107m* | |
| Year to 31 Dec | Gross premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 29.3 | 2.8 | 4.2 | 8.4 |
| 2016 | 53.4 | 6.4 | 9.9 | 8.6 |
| 2017 | 188 | 9.8 | 10.5 | 8.9 |
| 2018 | 184 | 14.3 | 7.8 | 9.2 |
| 2019 | 450 | 40.1 | 21.4 | 3.8 |
| % change | +145 | +180 | +174 | -59 |
| Ex-div: | na | |||
| Payment: | na | |||
| *Netted against £3.2m in lease liabilities | ||||
